Let’s face it, dealing with the IRS is tough. It’s even tougher when the IRS attaches a levy against your paycheck and/or bank account(s).
An IRS levy permits the seizure of your property to satisfy a tax debt owed to the United States Treasury. The levy can garnish wages, take money in your bank or other financial account, seize and sell your vehicle(s), real estate and other personal property.
When does the IRS issue a levy? This usually happens because the taxpayer:
Owes money to the IRS (and there’s a “Notice and Demand for Payment” sent to the delinquent taxpayer)
Brushes off the IRS and doesn’t respond to them at all (and there’s a 1058/LT11 “Final Notice of Intent to Levy and Notice of Your Right to A Hearing”)
What kind of letter did you get? The one below is an LT11 notice (see upper right hand corner). The type of notice will dictate your next steps and how many days you have to respond to the IRS.
Do you owe money from?
A filed 1040?
An IRS audit of prior years?
Unpaid 941 payroll taxes?
Something else (like a CP2000 Notice)?
Some options when addressing the balance due to the IRS when there’s a levy:
1) Fight it with the IRS
2) Pay the balance due
3) Arrange an installment agreement with IRS
4) Submit an Offer in Compromise to IRS
If you receive an IRS bill titled Final Notice of Intent to Levy and Notice of Your Right to A Hearing, you must act on it right away. Ignoring the notice can make things a lot worse!
What happens if there’s already a levy? Getting the levy released means contacting the IRS (if you don’t know how or what to do, talk to the attorneys at this firm to guide you through the levy mess).
And if you receive an IRS notice of levy against one of your employees, vendors, or customers, you MUST comply with the levy! Note: you cannot fire an employee just because the IRS issues a levy to garnish your employee’s wages (15 USC 1674).
This blog posting is not legal advice. However, if you require legal counsel, call us.